Finance panel OKs external probe of education budget deficit

Anne M. Amato

Updated 7:28 am, Thursday, January 9, 2014

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Board of Finance member, Michael Rea, speaks on the proposal to spend $15,000 for an independent, external audit of the Board of Education's health insurance account that has a nearly $2 milliion shortfall, as finance board members, Jennifer Tooker, and Janis Collins look on. less

Board of Finance member, Michael Rea, speaks on the proposal to spend $15,000 for an independent, external audit of the Board of Education's health insurance account that has a nearly $2 milliion shortfall, as ... more

Photo: Anne M. Amato

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Board of Finance member, Tom Lasersohn, (center) speaks on the proposal to spend $15,000 for an independent, external audit of the Board of Education's health insurance account that has a nearly $2 milliion shortfall during Wednesday night's finance board meeting in Town Hall. less

Board of Finance member, Tom Lasersohn, (center) speaks on the proposal to spend $15,000 for an independent, external audit of the Board of Education's health insurance account that has a nearly $2 milliion ... more

Photo: Anne M. Amato

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Board of Finance member, Tom Lasersohn, with head in hands, as he listens to Board of Education chairwoman, Elaine Whitney, express her concerns about an external audit of the education board budget shortfall Wednesday night. Finance board member, Lee Caney looks on. less

Board of Finance member, Tom Lasersohn, with head in hands, as he listens to Board of Education chairwoman, Elaine Whitney, express her concerns about an external audit of the education board budget shortfall ... more

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Board of Education chairwoman, Elaine Whitney, expresses her concerns about an external audit of the education board's budget during a Finance Board meeting Wednesday in the Town Hall auditorium.

Board of Education chairwoman, Elaine Whitney, expresses her concerns about an external audit of the education board's budget during a Finance Board meeting Wednesday in the Town Hall auditorium.

Photo: Anne M. Amato

Finance panel OKs external probe of education budget deficit

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An external audit of the $2 million deficit in the Board of Education's budget was approved Wednesday by the Board of Finance, despite concerns voiced by the school board leader.

The audit, approved unanimously after a two-hour discussion, will investigate the cause of the shortfall that accumulated in the school district's health insurance fund, but was revealed only a few weeks ago.

Superintendent of Schools Elliott Landon has already warned that, in order to compensate for most of the deficit, the 2014-15 budget he will propose will require more than 2 percent of a projected 6.5 percent spending hike.

While all finance board members backed the external audit, Board of Education Chairwoman Elaine Whitney expressed concern over getting an accurate accounting of the shortfall in a timely fashion since the school board needs to present its 2014-15 budget to the finance panel on Jan. 21.

"That's less than two weeks away," she told finance board members.

"The information you need is the information we want," said finance member Tom Lasersohn.

Education officials, however, still aren't certain of the exact amount of the deficit, initially estimated at $1,988,709.

On Monday, the school board approved an ad hoc committee with three of its members and the school district's business manager to investigate the problem.

Finance board members, however, agreed the matter needs to be investigated by an independent, external auditor. Members of the Representative Town Meeting had expressed similar sentiments at their meeting Tuesday night.

Lasersohn said there appears to be a $1.1 million variance in the health insurance account between March 19 and May 25. "We need to find out what happened and how it happened and who had the information," he said. "This is not just a budget issue, it's an overall management problem."

"This is public money and we need to now how it was spent," said finance member Janis Collins

She said the finance board should have known "there was a significant variance" in the health insurance account before Nov. 25, the date the finance board first learned of the shortfall -- a revelation that shocked several of the finance members.

"We need good information and we need it done quickly, properly and transparently," said Jennifer Tooker, a finance board member who until her November election, had been a school board member.

Finance board member Brian Stern said getting to the crux of the matter is important to maintain public confidence in school officials. That's why, he added, an independent, in-depth inquiry of the deficit and how it occurred is important. "It needs to be totally independent and antiseptic," he said.

Stern said the town charter recommends that all departments have a full audit once every four years.

"The Board of Education has had none in a while," he added.

"We need an independent assessment," said finance member Michael Rea. "We need to move on this. Let's get our feet on the ground."

Whitney told the finance board members the school board has "a very good idea of where we are at" in figuring out what caused the shortfall.

"I am clear when and where it happened," added school board member Paul Block, when he took to the podium. "It's not as hard as it needs to be."

The anticipated shortfall has been attributed by education officials, in large part, to underfunding the health insurance account for school district employees. The shortfall was uncovered by Elio Longo, the school district's business manager, who brought it to Landon's attention on Nov. 20.

Without the money needed to cover the deficit, as well as $750,000 in "safety net" money, the new budget request would have risen about 4.3 percent over the current budget of $104 million, according to Landon.

The superintendent also told the board that, after looking at ways to partially fund the shortfall, $200,000 could be saved in the cost of utilities and supplies in the current budget.

The first meeting of the Board of Education's ad hoc committee will take place at 1 p.m. Thursday in Town Hall.